Medicaid Reset: What We Know Now

Amid the fallout of the U.S. District Court’s decision in Civil Action No. 18-152, there has been and remains a great deal of confusion over the Bevin Administration’s recent actions and what they mean for providers as well as individuals and families served by the program. We’re in the same boat as everyone else, but we can let you know what we have learned so far. As with anything related to Medicaid these days, changes are occurring almost on a daily basis, so we encourage everyone to be vigilant for changes that may contradict previously-issued directions.

ALTERNATIVE BENEFIT PLAN States are required to declare what kind of benefit plan under which the expanded Medicaid population will be served. Until very recently, expanded Medicaid members had the same level of benefits as any other Medicaid member under what’s called the “State Plan.” This plan includes the services in question: basic dental, basic vision, and non-emergency medical transportation benefits and services. In the runup to Kentucky HEALTH, the Cabinet changed this benefit package to what’s called an Alternative Benefit Plan, or ABP. According to a notice allegedly issued on April 23 (curiously and generically titled “original notice,” although no one saw it until July 2), the state planned to implement a Medicaid State Plan Amendment, or SPA, to remove these benefits from expansion members. After July 1, expansion members were to win back dental and vision services by earning My Rewards “dollars” through various activities. Non-emergency medical transportation services would be non-existent, placing an estimated 43,000 with no means of transportation in danger of not being able to access any services.

Although the Court’s ruling stated “The Court therefore believes that preserving the status quo — including Plaintiffs’ continuity of coverage — is appropriate.” (p. 57), the state contends that there was no longer a “funding mechanism” to pay for dental or vision, so they “updated” the original SPA—amended the amendment—not to reinstate the benefits or to withdraw the SPA, but to keep the new ABP in place with no way to access services.

So to recap, the expanded “adult” Medicaid population is under an ABP that does not include coverage for basic dental, basic vision, and non-emergency transportation services effective back to July 1 in accordance with a Medicaid SPA that is still in a comment period. The state issued an emergency regulation (907 KAR 1:642E) on July 2 that codifies this action based on this SPA. It also contains copay changes that will be discussed later. Also worthy of note, children and very low income parents should remain under State Plan coverage.

MEDICALLY FRAIL As many may recall, Kentucky HEALTH was to include a process to determine some individuals as “medically frail” and therefore protected them from most Kentucky HEALTH requirements and penalties. Initially, we heard there would be no medically frail designations under the new ABP (indeed, medically frail is not mentioned at all in the emergency regulation filed on July 2). However, it is a CMS requirement for a state to have a process to identify medically frail persons who should receive the full services of the State Plan even though their income and household situation place them in the expansion category. A Kentucky HEALTH status update was issued by the state on 7/13/18, and there is only one Q&A related to medically frail: “I received a letter saying that I am “Medically Frail.” Am I still considered “Medically Frail” status? Yes. Any notification or designation of Medically Frail you received from the Commonwealth or your MCO is valid.”

As far as we know, some of the processes outlined prior to 7/1 remain intact, including an automatic designation for those with enough claims history and physician-attested medically frail designation using a cabinet-developed form and guidance. KVH understands this process has been frustrating and onerous, and that plans are underway to provide additional guidance and education.

We also know it was the Cabinet’s intention to protect recent refugees and survivors of domestic and interpersonal violence from the requirements of Kentucky HEALTH under the medically frail designation, but CMS did not approve of these individuals falling under the medically frail umbrella. Because this was a relatively last-minute development, the Cabinet came up with work-arounds to continue providing benefits as if these individuals were under the State Plan even though they’re officially in the ABP. When the Administration chose to implement the ABP after Kentucky HEALTH was struck down by the court decision, however, they did not create a path for refugees and DV/IPV survivors to access dental, vision, and non-emergency medical transportation benefits.

What we do not know or have not been able to verify at this point is whether the self-attestation process is still intact for those with an inability to complete activities of daily living or those experiencing chronic homelessness. For the latter, a Cabinet official has recently stated the definition of “chronic” will move to the more stringent HUD definition of 12 months.

COPAYS Copays have existed, at least in 907 KAR 1:604, since Kentucky moved to providing services through Managed Care Organizations, or MCOs. Section 5 of that regulation, copied in full below, indicates that the regulation is permissive rather than prescriptive in nature:

Section 5. Provisions for Enrollees. A managed care organization:

Shall not impose a copayment on an enrollee that exceeds a copayment established in this administrative regulation; and

May impose on an enrollee:

A lower copayment than established in this administrative regulation; orNo copayment.

The new regulation (907 KAR 1:642E) filed July 2, 2018, in addition to the changes to the benefit plan for expansion members, also (in Section 3) requires the MCOs to require providers to charge the copays for adult expansion members, notwithstanding the permissive nature of copays in 907 KAR 1:604; no ifs, ands or buts. This already brings up serious access questions, principal being whether a provider will have the authority to refuse service due to lack of ability to pay copays.

But there are also other questions being brought up regarding populations other than expansion adults having the copays applied to them. Federal law and guidance provides a specific list of individuals exempt from cost share requirements, and it’s our understanding that Kentucky intends to make copayments a requirement for anyone not on this short list, including Medically Frail individuals and others on the State Plan. This will cover many, many more Medicaid members than the expansion population! It is unclear from where the authority to force MCOs to charge everyone originates, since that original regulation hasn’t been changed at all.

As always, as we learn more information, we will keep everyone updated. We are developing a list of questions such as the ones highlighted here, and hope to get answers to everyone as quickly as possible.